China set to become leading maker of paints, coatings - F&S

31 March 2010 13:36  [Source: ICIS news]

(Revised with added quotes from AkzoNobel and Tikkurila.)

SINGAPORE (ICIS news)--China, powered by its high economic growth and heavy infrastructure investments, could soon become the world’s largest producer and consumer of paints and coatings, consultancy firm Frost & Sullivan (F&S) said on Wednesday.

In a web-based presentation, F&S said that the Chinese paints and coatings market grew by around 10% last year due to increased domestic consumption, despite the global economic downturn.

“With a total production volume of 7.5m tonnes in 2009, China is primed for the top placing in world coating production and consumption,” said F&S.

In 2008, China’s paints and coatings market was valued at $21.8bn (€16.4bn), accounting for more than half of the value of the $40.1bn Asia-Pacific market, F&S said.

In contrast to China’s 10% growth last year, the regional market saw marginal growth, said F&S analyst Sheila Senathirajah during the web presentation.

“The industry in 2009 witnessed a continued slowdown, particularly in the first two quarters of the year…[with] a rebound in late 2009,” she said, adding that major consumer countries such as China and India propped up the market.

Senathirajah said that the Asia-Pacific region would continue to grow in the next two years due to a combination of strong economic expansion and mergers and acquisition (M&A) activities.

Netherlands-based specialty chemicals company AkzoNobel has had a presence in China since the 1970s, it said.

“As the economic reform of China evolves, AkzoNobel has been playing a major role in this market. As the world’s largest paints and coatings company, we are also very active in this high-growth market,” said Colin Tan, AkzoNobel’s country director for China.

“Obviously, we have been here for decades because we see the potential,” said Tan.

Markku Immonen, group vice president of business development with responsibility for operations in China for Finland-based paints producer Tikkurila, said: “China is a very interesting market for us, even though our main focus is not there today.”

Immonen said Tikkurila was building its operations in China step by step, having opened sales offices in Beijing in 2007 and in Shanghai in 2008, as well as by developing its distributor network.

“[Tikkurila's] range for the Chinese market includes mainly high-end products; the competition on the medium and low-end market is very fierce,” he said.

($1 = €0.75)

Read John Richardson and Malini Hariharan’s Asian Chemical Connections blog
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By: Nurluqman Suratman



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